Senator HEFFERNAN (New South Wales) (20:50): Well, where do I start? That was a fairly off-the-subject sort of way of working out what is discovery and what is invention. Can I say that this bill does not address the core problem. There is a lot of gutless rhetoric that has been given by government bureaucrats and people who have spoken on this which does not address the question: why are we allowing the patenting of discoverable material to be included in inventive patents? So as to highlight the fundamental flaw, which is not addressed by this bill, Senator Boyce talked about a can-opener being patented, the point being that the steel that the can-opener was made of is not itself patented; the inventive use of the steel is. The problem we have in the patent world—and Australia is a soft entry point for patents globally—is that we have included in the patents, which have now been challenged in Australian and American courts, the discoverable material. No-one was allowed to discover and patent the moon and, Senator Scullion, you cannot patent the wood in a tree—but you, being a clever bushie, might be able to patent a use of the wood. You might have been able to make a smart boomerang, but you could not actually patent the wood that the boomerang was made out of. This argument is as simple as that, and there is a lot of gutless political cover given to that. Politicians have been intimidated by the commercial world, and I have to say they are winning the argument.

When the minister last rose to speak in support of this bill last June, he described it as 'a major reform of the intellectual property system'. He also said it would 'ensure that Australia maintains a world-class intellectual property system'. But, at the same time, he did not have the courage politically to define the line between discovery and invention, so who is he kidding? The legislation does absolutely nothing of the kind. It really only feathers the nest of patent lawyers—and we have had plenty of them through the inquiry—patent attorneys and their mostly foreign owned clients. Australia is a soft entry point. The legislation ignores the opportunity to make real and lasting reforms. Why wouldn't you allow the freeing up of access to the discoverable material—that is, the gene? This bureaucratic—I will not say BS argument, but it is—

Senator HEFFERNAN: The bureaucratic argument that has been put by a whole lot of people ducking for cover is that somehow—through you, Madam Acting Deputy President Fisher, and it is good to see you up there—discoverable material is included in the patent because the precedent has been set over 30 years. The patent system is steeped in a quagmire in this area, and it has been misused, misapplied and misappropriated. This legislation is not going to fix that. I have to say that, until we have the courage to understand that, as the bill demonstrates—and there is probably no harm in the bill, but there is no use in the bill—

Senator HEFFERNAN: You may laugh, Madam Acting Deputy President, and the bureaucrat may think it is laughable material, but I do not think it is. I think your attitude is gutless. This is all about whether we have the courage to say—

Honourable senators interjecting—

Senator HEFFERNAN: Yes, ignore it—that discoverable material is patented or not. This is all about saying, 'Well, we'll give an exemption for research.' All right. Suppose I am a laboratory and, Madam Acting Deputy President, I apply to you for research because you hold the patent on the gene that I want to research. I have a smarter laboratory and a smarter technician than you, and I beat you to the commercialisation prize. So then do I go back to you and say, 'Can I now have an exemption so I can commercialise my research?' You will say no. If you do not say no, why did you have the patent on the gene in the first place? It is an absurdity to say that you will give an exemption for research when it naturally follows that you will need an exemption for the commercialisation of that research.

The argument put by all the phoneys in the debate is that, if you do this, you will somehow have a decline in research. You will not at all. This is not about banning inventive work to be patented—work that has an inventive step and a commercial and useful purpose. You can certainly patent it. This bill is about nullifying the argument through some phoney clause that you can give an exemption for research, which does not address the question of how you then proceed to give an exemption for the commercialisation when someone else is holding the patent. Most people, when you talk to them, say, 'How in God's name can you patent something that is naturally occurring in your body?' This is the bureaucratic answer to the minister—certainly in the case of the Department of Innovation, Industry, Science and Research as opposed to the Department of Health and Ageing. By the way, just for the record, the department of health is seriously opposed to the view of the department of industry on this, because the department of health knows the added cost to health care in the case of biological materials for pharmaceuticals. We have not even begun to talk about the cartel that is growing in the seed world for food production; we will get to that. Do not ask me what this has to do with a tin-opener, as demonstrated, or the Sydney to Hobart yacht race.

This is about having the guts to say—which is clearly demonstrated at law—that discoverable material is not patented. What is in your body no-one invented, but people did discover it. We now have medical opportunities for research and enhancement of human life, which includes multiple series of genetic sequences. So, if you are tucked away in the back of Westmead Hospital in a little room on a six-month contract because the hospital cannot guarantee you any longer than six months—which is actually a fact of how it works—how can you mount a case against a bunch of lawyers and a multinational to defend your rights to do research on a gene that is naturally occurring? The phoney argument is, 'Oh, well, we've isolated it; therefore it's materially different from what's in your body.' That is absolute rubbish. It is identically the same. There is no material difference. We demonstrated that through estimates, and IP Australia was up there versus the health department, and they were fundamentally opposed during the hearing. This is just cheap political cover.

I just take you to an example. I have asked to table some documents of a court case which I am about to address, and hopefully they can be tabled. The government have those documents and they have said that it is okay to table them. I raised this in estimates the other day. A French pharmaceutical company called Sanofi-Aventis succeeded in absolutely hoodwinking Australia and the patent office into giving an extension—one of these evergreening patents—for a drug called clopidogrel. As a result, the total period of the patent protection, which was due to expire in 2013, was nearly 30 years. The second patent, however, was revoked in 2009 by the full Federal Court. The High Court refused to interfere. These are the problems here. First is the cost to the PBS. When the pharmaceutical company took out the injunction to go to the High Court against the generic company in 2007, it said in the injunction—and the documents back this up—that it would recompense the Commonwealth for any loss to it through the extra funding of the PBS, instead of having the generic brand. The reality was that the cost to the Commonwealth in that time was $60 million. The High Court refused and the pharmaceutical company lost, but the Commonwealth has not collected, and I presume it will probably spend $60 million in legal fees to try to get it. The cost from when the original patent ran out to the present time is somewhere between $480 million and $600 million extra because of the evergreening effect of the patent, which has been declared invalid. And who in the government has got the guts to go to the pharmaceutical company and say, 'We would like compensation for that?' This is just one pharmaceutical line. It is because of the flaws in the patent law, where patents are allowed to include the genetic material which is naturally occurring.

I assure you that, if you thought about it, without biotech and patent lawyers whispering—as they do around this building—you would agree that no-one invented the BRCA genetic mutations linked to breast and ovarian cancers, but they were certainly a discoverable material. Yet here we are about to vote on a bill that the minister says makes all the problems about the patent system, including the ones I have just talked about, go away. That is as big a furphy as Myriad's claim to have invented the BRCA human genes that cause breast cancer. There is a legal process and, as we all know, the courts are not actually about truth. If you have ever been to court you will discover that the courts are about the law. If you are guilty, you get a good solicitor or a lawyer or a barrister, not to tell a lie but to use the law to avoid the truth. It goes on all the time. It happened the other day. I had better not mention the case, but if you take a trip to The Gap you will find the case. Rather than give research scientists an exemption from patent infringement, which is one of the things this bill's so-called improvements do, wouldn't it be better and more efficient if the scientists' knew upfront that any discoveries of nature, such as the BRCA human genes, are simply not patentable? Everyone agrees that you cannot patent discoverable material but no-one wants to draw the line between discovery and invention. As for raising the inventive step threshold—it is actually lowering the bar—what is the point of the exercise when IP Australia, the patent attorneys and the patent pharmaceutical companies can drive a truck through the loophole? It is as simple as that. This bill may be well intended but it does not address the problems.

I would just like to go to Senate estimates and define this one pharmaceutical item. In March 2010, two years ago, the High Court of Australia rejected an application for leave to appeal in a patent case concerning the drug Clopidogrel. Until then, the drug had been subject to two Australian patents. The original patent over the chemical compound expired in 2003. Sanofi-Aventis, the patent owner, had applied for and was granted a second patent—as we call an evergreening patent—over virtually the same chemical compound. The difference was immaterial, so the full Federal Court found. The second patent was due to expire in 2013 because the Federal Court held that it was invalid. A decision of the High Court was not prepared to interfere with it and the second patent came to a premature end in March 2010. This saved the PBS and the Australian taxpayers tens of millions of dollars and is a good example of the issue of lax patents being granted by IP Australia. Globally we are known as a soft entry point for patents.

Here is the problem. As part of the legal proceedings, the pharmaceutical company Sanofi sought and was granted an interim injunction to prevent Apotex, a generic medicines company, from marketing a generic version of this particular pharmaceutical. That was back in September 2007. As a result of the injunction, the generic company Apotex was enjoined from marketing the generic version and this resulted in two things. First was the automatic price reduction of 12½ per cent, which, by the way, is now 16 per cent, that applies to any PBS listed drug on market entry or if a generic version does not happen. This is why the Department of Health and Ageing are really concerned about the patent law, whereas the Department of Innovation, Industry, Science and Research, which is driven by all the lawyers and their promoters and the people who creep around this building giving you stuff and getting paid good money to do it, have a different view. This meant the PBS had to keep paying the same price to Sanofi-Aventis that it agreed to under the PBS while a patent was alive. Secondly, it was a condition of the grant of the interim injunction that Sanofi-Aventis agreed to compensate any party, which included the Commonwealth, adversely affected by the interim injunction. This means that when the High Court of Australia refused the application for special leave to appeal, that condition to the interim injunction took effect. No-one has done anything about it.

The estimated cost of the interim injunction between September 2007, when the injunction was granted, and March 2010, when the injunction was lifted, to the Commonwealth PBS—and therefore taxpayers—is some $60 million. That figure does not take into account the benefit of the illegal patent monopoly that this company had since the first patent expired in July 2003, which has been estimated to have cost between $480 million and $600 million for one pharmaceutical item.

So my question to the Department of Health and Ageing was: what have you done, what are you doing or what are you planning to do to collect at least the $60 million from the pharmaceutical company? At five per cent per annum on the debt, which has not been collected, it certainly starts to compound. I would also like to know what involvement the Department of Health and Ageing had in the patent litigation between Apotech and Sanofi-Aventis. I understand that any patent law suits must be served under IP Australia under the Patents Act. IP Australia has the right to be heard by the court. Would the department care to enlighten me in this chamber on what steps were taken to ensure that IP Australia intervened in these proceedings so as to protect Australian taxpayers from overpaying this pharmaceutical company? You may smile, Madam Acting Deputy President Fisher; this is a serious issue. We are talking about $600 million because of a slack patent law interpretation.

I also understand that one of many patent cases inviting what we might call evergreening is this one: that is to say patents over some pharmaceuticals renew the period of patent protection for so-called innovations that often amount to little more than a new cover around a pill or tinkering, as in the case of clenbuterol, which the High Court has rejected. It is hardly what you call inventive.

I would like to know what protection Australian taxpayers have against this sort of behaviour. In this debate we have the patients, the people locked away in those little rooms on six months wages, universities, people driven not by money but by vocation against lawyers, attorneys and bankers who are trying to avoid the question for the betterment of human health and the future of humans on the planet to an affordable access to health remedies by absolutely having the guts which this bill does not address. It does not address the fundamental problem of why we have allowed the patenting of discovery. We have allowed discovery through the broad interpretation of patent law to be included in the inventive side. Why can't we say, 'Sure, you've have got the gene there. You've twigged it. You've done something with it which is inventive, commercially useful and patentable, but let everyone have access to the original gene'? They say it is because you will reduce research; you will actually increase research, and no snarly, smiling legal advice can get around that. I seek leave to table these documents.